Attack of the clones

"Craig", presumably Craig Pratka, part-owner of Zoozle.com, wrote to us to correct the timeline we have up about bid-fee sites. I'll leave it to my co-blogger, who likes doing stuff like that, to make the correction to the graphic, but I'm always excited to hear from other people in this industry.

In doing some research about Zoozle, I came across the press-release they put out on the occasion of their going live. It included this shocking paragraph about their experience with the standardized "turnkey" software so many penny-auction sites use.

The software came with an 'Autobid' feature and instructions for the site admin to set fake user names and autobid timing from the back end. The feature can be disabled.. but when disabled, the sites critical functions, like bidding, did not work properly.

Shocking, but candidly, not surprising. It's very easy to be dishonest in this business -- even the word "dishonest" is somewhat euphemistic, here; "autobid" is shilling and in a bid-fee auction, shilling is outright fraud.

Cynical as I am, I was still shocked that the commercial software had shilling built in, had defraud-your-customer built right in. Wow, how do the people who develop that software justify what they do for a living to themselves?

So stay away from clone sites. They're easy to spot, they look just like Swoopo. Same green buttons, same unmistakeable red flicker when the timer is pushed back. They are all using the same software underneath. I have no idea what fraction of clones are actually using the shilling feature (or doing anything else dishonest), but why take the risk?
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In the mailbox: BidHof

I got an email from someone calling herself "Victoria Blechman". On the Internet, you always have to be suspicious about names (my parents didn't name me "Malvolio", for example), but would anybody pick "Blechman" as an alias?

In her somewhat eccentric English, the presumably-authentic Ms Blechman plugged her new Germany-based auction site, BidHof ("hof" is "yard" or "court" in German). The pitch involved eBay-like consumer-to-consumer (C2C) auctions. Now, I've always been a little dubious about C2C penny auctions, so I was curious to see her site.

Sadly, the site was still embryonic at best. It offered a set of ordinary bid-fee auctions, using what is obviously same software used to implement a lot of other auction sites. It talked in vague terms about C2C but didn't actually support it as far as I could tell (the site implementer has the same English-as-a-second-language style as Ms Blechman; it might have been Ms Blechman).

Ah, well, the search continues.

UPDATE: See here for more on Ms Blechman and BidHof.
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If It Sounds Too Good to be True, It Probably is, Unless it's a Penny Auction

(What do you mean these TVs don't cost $10?)

Late last night BestBuy accidentally set the price of a 52-inch TV on its website at $9.99, instead of the true retail price of $1,699, allowing shopping pandemonium to ensue. Consumers who noticed the deal in the wee hours of Wednesday morning jumped at the amazing offer, with many buying several or more of the sets. However, as age old wisdom goes: if it seems too good to be true, it probably is. BestBuy quickly fixed the mistake and told customers who purchased the $10 TV that the sale would not be honored.

While no one expects to get a 52-inch HDTV from BestBuy for $10, readers of this blog probably know of a few good sites where they might be able to snag such a deal. In the world of penny auctions, $9.99 doesn't sound like such an unrealistic price for a 52-inch TV, maybe a little low, but not unrealistic. Swoopo recently sold a similar TV for just over $100 and some of the lesser known sites can have even better deals.
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The Never Ending (Penny Auction) Story: Jungle Cents

So, as I blogged about in an earlier post, I registered with Jungle Cents and was given a free bid to get me started, this was on July 30th. I used the bid to reserve a space in a seat auction for an iPod Shuffle, which at the time was the only auction I could afford with my one bid. In my original post about Jungle Cents (also on July 30th), I noted that the seat auction for the iPod shuffle received its first bidder on July 8th. Back then I said of that original bidder, "...that person has been waiting weeks for this auction to start and only a small fraction of the seats have been sold. This isn't fair! People who buy bids to compete in these auctions expect their auction to start in a reasonable amount of time. At this rate it's going to take months before anyone can bid on that iPod!"

Now it's been over a month since the original bid was cast and 13 days since I cast mine. When I placed my bid there were 63 out of 75 seats vacant, today there were 49, and the auction can't start until all are full. In my original post I said one of the risks users face when playing penny auctions - or any "game" where money is exchanged for a product that is not received or consumed immediately - is the possibility that the company goes out of business. I don't know what Jungle Cents' financial or operational status is, and their website claims they have completed 170 auctions, but they have been very quiet since I started watching and appear to have locked-up some players' money for a very long time. I don't agree with this practice, and if I had spent money on my bid I would be complaining to customer service. If you have had an experience with Jungle Cents, good or bad, please let us know in the comments section or by email.


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GoBid.com Is Blessed by the Gods of Publicity

Local ABC affiliate WPVI in Philadelphia ran a story about GoBid this past week and had nothing but good things to say. The story, which runs about two minutes, profiles what in my opinion is one of the lesser penny auction sites out there in the station's "Saving With 6" segment.

ABC describes GoBid as a site where users can get amazing deals, but where they might spend more than they realize. An ABC reporter talks with who I will assume is a GoBid executive, but I say "assume" because the guy's name and title are never mentioned. The report never even mentions whether or not he works for GoBid.com.

I thought it was interesting that ABC chose to profile GoBid without any mention of other penny auction sites. GoBid is one of dozens of small penny auction sites that cower in the shadow of Swoopo and Bidcactus. Ok, "cower" is a bit of an exaggeration, but they're certainly much smaller than Swoopo and Bidcactus from a traffic perspective.

So why did ABC choose to profile GoBid?

Is GoBid doing something unique that warrants media coverage?
No, they're just like 15-20 other penny auction sites.

Is GoBid from the Philadelphia area, and ABC wanted to focus on a regional business to better connect with their audience?
No, GoBid has offices in Miami and San Francisco.

In other breaking news, ABC WPVI sucks.

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Penny Auctions Aren't the Only Place to Get A Great Deal

We at Penny Auction Insider enjoy penny auctions, obviously, and while we don't play as often as many of our readers, we get just as excited about the savings that can be had. However, penny auctions aren't the only sites on the web where online savvy consumers can get great deals and a little entertainment. Woot and GroupOn are two social media entertainment shopping sites that allow users to get a fabulous, if not completely random deal of the day.

Woot offers a "Today's Woot," which is a product the site has managed to buy in bulk at an extremely low price. Take a scroll down their blog for an idea about past Woots. They offer everything from mid-range laptops (today's Woot) to golf bags and talking smoke detectors. It seems like a lot of Woot-ers buy the deal of the day just so they can share their experience in the online forum. Woot also displays statistics about how fast the product is selling and how long it takes to sell out (sometimes it does, sometimes it doesn't, but there is always a new product the next day).

GroupOn is a collective buying site that features a new deal each day for 17 cities around the US. Today in San Francisco it was a bay cruise for $26 (50% of the list price). The site negotiates with the supplier and they agree that if a certain number of people buy the item, the deal goes through at the list price and if it doesn't, the deal is void. GroupOn leverages the power of the masses to get good deals. However, most of the stuff is local, so you have to be in the geographic area to take advantage of the deal.

For an interesting economic analysis of GroupOn, Evan Miller goes to town here.
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Living in SIN

I've been following Swoopo's new feature "Swoop It Now" (SIN) with considerable interest. This is a feature that allows non-winning bidders to apply the cost of their expended bids toward the outright purchase of the merchandise. My prediction was that it would drive the bid levels way up, as a bidder who was interested in buying the merchandise would have no reason to stop bidding once he had invested enough bids to make buying the item a good deal.

This has not happened. At all. At least, it hasn't happened yet. And I want to know why not.

Right now, Swoopo is selling a Nikon D90, a very nice camera, I happen to have one myself. Amazon sells it for $1,139.95 and by what is certainly not a coincidence, Swoopo shows $1,139 as its list price. So if you want the Nikon, instead of going to Amazon, go to Swoopo, buy 1900 tokens at 60¢ each, $1140.00 bucks works, and load them into the BidButler.

You might win and get the camera for something around $76.00 (1900 of your 2¢ bids plus the same number of 2¢ bids from whoever is foolish enough to bid against you). In fact, you'll probably win, because you have the huge war-chest to discourage rivals.

And if you don't win? You buy the camera for the same price you'd pay on Amazon.

Somebody should try this. I'll wait here.
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